Brexit fears send pound spinning, but shares soar

Tuesday, October 04, 2016 - 01:41

Britain's pound slumps to a three-decade low largely thanks to more home-grown Brexit worries. As David Pollard reports, it sent stocks up, with the FTSE 100 topping 7,000 for the first time in more than a year.

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New highs and lows for UK assets - if the reasons why are already familiar.
The pound at a 31-year bottom as markets fret over a so-called 'hard Brexit'.
(SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING:
"The truth is this not new news .... Yes, we had Theresa May putting a date on the point at which we were likely to exercise Article 50 and start the formal process to withdraw from the EU, but let's be clear: the country voted on June 23rd and made its views absolutely plain."
But a new sense of risk is plainer still.
The UK prime minister's end-of-March deadline - announced on Monday - seen tipping Britain, possibly, into a new age of uncertainty - with the UK potentially giving up its preferential access to the single market.
If for now, sterling's slump is UK shares' gain.
(SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING:
"Around 70 per cent or maybe more of FTSE 100 revenues come from overseas. The pound falls, the goods and services that those companies sell become cheaper to foreign buyers and the market believes therefore that they will benefit from that, and share prices rise."
Prices rising above the key 7,000 level for the FTSE 100 for the first time in over a year.
Even as traders braced for the market impact that Britain's Brexit negotiations are almost certain to have.
(SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING:
"The truth is you can expect more volatility as we go through. The process is going to take two, perhaps five or six years to complete and I think we'll see periods of positivity and periods of negativity within that."
The FTSE 250 index of mid-cap stocks touched an-all time high.
Helped by positive data from the construction industry.
Some parts of the UK economy still apparently Brexit-proof - its markets, though, increasingly vulnerable.

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